BATS: Yes, We Have No CIO

For the second time in 10 months, BATS Global Markets Inc., the third-largest U.S. exchange operator, has cited a technology issue as the reason for a major trading problem. In both cases, the company, which has no CIO, has defended its technology management by noting that other senior executives effectively fill that role.

But at least one financial technology expert argues that BATS has outgrown its current leadership structure, and that bringing a CIO onboard may help improve management and operations. “When BATS was set up it was tightly enough managed that they didn’t need to have someone in that role — they all worked in the same room together,” said Larry Tabb, CEO of financial markets researcher TABB Group. “But as they have grown and are dealing with multiple asset classes and geographies they may be at the point where they need someone to fill that roll.”

BATS’ two largest rivals—NYSE Euronext Inc. and Nasdaq OMX Group Inc.—have CIOs.

The latest problem was announced yesterday. The company said a systems glitch caused trades to be executed at prices that may have violated security laws. The latest issue comes 10 months after another IT error forced the company to pull its IPO. The company confirmed to CIO Journal on Thursday that it still doesn’t have a CIO.

The latest glitch in the BATS trading platform caused some trades to be executed with buyers offering bids below the best available price. The problem had affected the system over the past four years and resulted in a loss to customers of $420,360.57, the company said.

The problems were not discovered until last Friday, Randy Williams, a spokesman for the company told CIO Journal.

Though the company doesn’t have a CIO, Mr. Williams says the company’s chief operating officer, Chris Isaacson, effectively serves the same function.

The company had the same position last March, when a systems failure forced the firm to cancel trading its new stock. Soon after, Mr. Isaacson told CIO Journal that the company had plenty of technologically minded executives, including CEO Joe Ratterman, a former CIO of LabOne.

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